PCAF stretches the net on financed emissions
Financed and insurance linked emissions have long had a habit of slipping through the cracks, particularly in the more complex corners of the financial world. The Partnership for Carbon Accounting Financials (PCAF) is now tightening its guidance, substantial expansion of its Global Greenhouse Gas Accounting and Reporting Standard for the Financial Industry.
The update brings use of proceeds structures, securitisations, structured products, sub sovereign debt, treaty reinsurance and project insurance into clearer scope, with extra guidance on avoided emissions and forward looking metrics. In other words, many of the instruments once treated as “too complicated to measure properly” are now firmly on the menu.
For banks, insurers and asset owners reporting carbon emissions, this provides helpful guidance. Common methods replace unique spreadsheets and guesswork, while more consistent numbers could sharpen questions from investors, supervisors and NGOs. The challenge now moves to implementation, data and the digital plumbing that will need to carry these new metrics, ideally in structured, comparable format.
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